created a brand new project and tried the same thing & get the same error. Can change "bundle name" in the plist file and the app name under the icon changes / works. But when I go to localize the plist file and then run I can the error...
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GregNov 24 '11 at 4:58

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got the exact same error here. however, not many people seem to have gotten bit by this. Did you solve it in the end?
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uvestenJul 11 '12 at 22:27

1 Answer
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You don't localize the Info.plist file itself. Leave the one English version at the root, then create InfoPlist.strings files alongside your internationalized resources in the individual language directories. It will replace strings at runtime.

For example, if you wanted the German version's app to show up as MeineApp, you'd create an InfoPlist.strings and put it in you de.lproj directory and have it contain: